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The Role of Government in the Economy : - Coggle Diagram
The Role of Government in the Economy :
Ensuring the Safety of the Consumer. :star:
Role of Health Canada
Health Canada is responsible for helping Canadians maintain and improve their phyisical and mental health.
Product Recalls.
If a product passes all safety tests it is usually trusted in the market, however, the government agencies responsible for consumer safety cannot oversee all production. A recall allows the consumer to have their purchased good repaired for free or get a refund.
Role of CSA.
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Companies like the Canadian Standards Association and the Consumer Product Safety Commission ensure that products meet industry standards for safety.
Promoting a Stable Market :star:
What is a Monopoly?
Monopolies are when a supply or service is controlled by one major corporation. For example, if you are the only shoe cleaner in St. Albert you would have a small monopoly.
Why are Monopolies Bad?
Monopolies threaten the economy by leaving the majority of the demand for a product to one company. When this happens the competition is cut out because they can set prices to what they want and consumers are forced to pay. Also with no other competitors quality is not always guaranteed and there is no incentive to make the product better.
Example of a Monopoly
An example of a monopoly is De Beers Diamond Company, this company used to control large parts of the diamond market once they had control they were able to change prices so their competitors could not compete. De Beers used artificial scarcity to their advantage and limited or sold more of their products to fluctuate prices.
Labour Laws :star:
What are Labour Laws?
Labour laws are rules enforced by the government that enforce safe and ethical business practices. Ex. Workplace inspections.
Why are labour laws important?
Labour laws are important because they enforce fair and safe business practices and try to limit monopolies. They do this by not allowing certain companies to buy out other companies. (In Canada Bell, Rogers, and Telus own 88% of the cellular industry.) An example of enforcing safe businesses is a restaurant having an inspector doing mandatory checks of their restaurant. Labour laws also provide fairness and equality to workers by allowing them to get proper breaks, wages and notice for termination.
Price Fixing :star:
What act protects consumers from companies price-fixing
It is called the Consumer Protection Act. This act protects consumers from different unfair business practices, before and after their transaction. The prohibition also extends to any advertising, packaging or labelling that may mislead consumers as to the safety of the product.
What is price fixing?
Price fixing is an agreement amongst many different people competing with eachother to raise or lower or stabilize prices. Price fixing goes against the law of supply and demand by in a sense creating a monopoly.
Environmental Protection :star:
Why are Environmental Protection Important?
Environmental protection is important because without it companies would be blinded by profits and polute the environment as much as they needed to make money. Government agencies ensure the companies meet environmental protection standards so that they can cantrol how much these industries polute and can keep the world healthy.
Example of Environmental Protection?
Examples of Environmental protection include forestry companies and harvesting. After harvesting a forest the company must pay to have trees replanted in the area they harvested, this insures that we wont run out of trees and it keeps our forests healthy.
Crown Corperations :star:
What are They and Why do They Exist?
Crown corperations are created to fulfil a need that would not make any profit for a private company. they exist because when a infustructure is to expensive to make any profit but is a requirement for a city the government pays for some of it so the company can make a profit. Some crown corperations are used to promote canadian culture and identity. Or they could sell a crown corperation to the highest bidder and privatize it because it was to expensive for the government.
Examples of Crown Corperation
Examples of crown corperations include CBC, a 100% government funded news program that shows only canadian content. electric and water infastructure that would not make any profit if the governemtn didnt use tax dollars to help support the creation of the infustructure.
Drawbacks of Government Involvement :star:
Examples of Government Corruption and Collusion
Sometimes the government is not always fair and officials can learn information before the public causing them to act on it. For example US senators sold stocks learning about what Covid-19 could do to the market.
Waste and Ineffieciencies
Many people have this idea and think that government organization have a reputiation for being inefficient and wasteful. Goverernment emlpoyees are paid large salarys and have good job security meaning they dont have to worry about getting fired so this can lead them to becoming lazy and we end up paying for them through taxes.